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News analysis Australian farmers could have a huge impact on greenhouse emissions and the government needs to start seriously encouraging them to sequester carbon in their soils, say some experts.

The comments come as the Garnaut Climate Change Review delivers a draft report, which acknowledges changing the way we farm can have a big impact on our greenhouse emissions.

Professor Peter Grace of the Queensland University of Technology, an expert on agriculture and greenhouse emissions, estimates that in an ideal situation, more than 900 Megatonnes of CO2 equivalents could be sequestered per annum through improved pasture management.

"It's a very significant amount of carbon," he says.

Grace says even if only 10% of this amount was achieved it would result in a significant reduction in Australia's carbon emissions.

Despite this, most - including the Garnaut draft report - say agriculture can only be included in a national emissions trading scheme when there is more rigorous scientific data available on what is emitted and sequestered.

One way to sequester carbon is to grow a bigger crop using more fertilisers, says Grace. But nitrogen fertilisers produce nitrous oxide, which is a powerful greenhouse gas.

He says any credible scheme would need to include greenhouse gases emitted from animals, fertiliser and tractor use, as well as carbon sequestered by the soil.

But there is a lack of data and methods to back up such a scheme, says Grace.

Taking action now

Despite these difficulties Grace and others think there is still much that can be done to encourage climate-friendly farming practices, while waiting for more data to come in.

John Connor of the Climate Institute says the government should give some signal to encourage farmers to sequester carbon in its Green Paper on emissions trading, due out on 16 July.

Connor says the government should clarify its view of the role of soil carbon offsets.

He also says there should be more funding for research into soil carbon management.

The Climate Institute recently established a Soil Taskforce to investigate all opportunities to make soil carbon storage an economic reality.

Accounting for uncertainties

Both Grace and Connor argue even with the uncertainities, it would be possible to begin trialling agricultural emissions trading in a voluntary offset market.

Grace says this would help farmers hedge their bets for when agriculture is eventually included in official emissions trading.

He says such a scheme could account for the scientific uncertainty in measuring agricultural emissions and sequestration by offering discount credits.

Under this system farmers could, for example, get credit for half the estimated amount of carbon they are sequestering in their soils, with the hope of later using these credits in an official system.

One such scheme is the Chicago Climate Exchange in the US, which according to aspiring trader Tony Lovell of Soil Carbon Australia, has already traded 26 Megatonnes CO2 equivalents, including 11 Megatonnes from soil carbon projects.

Grace says there is enough basic scientific information on soil carbon in Australia to have the beginnings of a voluntary scheme up and running in the next 6-12 months.

But he says it will be essential for other gases, such as nitrous oxide from fertiliser use, to be included in the lead up to formal trading in agricultural emissions.

Economics

Grace says the bottom line for farmers will be economic.

Mick Keogh from the Australian Farm Institute says, Australian beef farmers are vulnerable to competition from countries like Brazil, which are not required to reduce greenhouse emissions.

Methane emissions from agricultural animals are a major contributor to greenhouse emissions - a problem recognised by the Garnaut draft report.

Nevertheless, Keogh indicates some support for a voluntary trading scheme.

"There is good reason to think that, given some robust accreditation and verification standards, this voluntary market may be the way in which a market for soil carbon sequestration can be developed," he says.

No quick buck

Given the complications involved, Grace warns against farmers thinking they can make a quick buck from trading soil carbon at this point in time.

He says sequestering carbon should be considered as an investment in adaptation to climate change rather than a money-making mitigation strategy.

"Farmers are going to make more money making their farms resilient to climate change than selling soil carbon," says Grace.